Besides all other metals, gold has been holding the first position for centuries when it comes to value. It has been used as a money or currency equivalent depending on a region.
Nowadays there are many options of investing in gold, unlike hundred years ago. Some of investing opportunities are:
- Buying bullion gold bars. This is the most traditional way of investment in gold which is supported by major banks. Golden bars are available in different sizes, depending on state policies. For example, the weight of one bar in Europe is 12 kg.
- Investing in gold coins. It is a common way of investing in gold. Usually, investing in coins cares higher price than investing in bars. Sizes of the coins vary from one-tenth of an ounce to two ounces. However, the most popular ones are those of one ounce weight.
- Gold ETFs. This means gold exchange-traded funds which often come along with exchanged-traded notes (ETNs) and close end funds (CEFs). These are traded as shares on the market as stocks. It is very practical way of investment when you want to avoid inconveniences with storing physical bars.
- Buying certificates. This is also a good way of investment when one wants to avoid storing bars or coins, storage fees, theft and insecurity. There are two ways of how banks usually issue certificates, the first one is allocated (fully reserved) and the other one is unallocated (pooled).
- Buying accounts. There are several types of accounts that can be bought, which depends on bank policies. In this way, gold can be bought and sold as any other foreign currency.
- Investing in mining companies. Instead of buying gold, investor can buy shares in mining company. The worth of company and its shares are expected to rise as the price of gold rises in the market. However, it does not have to happen necessarily. There are some factors that can lower the worth and the price of mining shares such as floods, subsidence, structural failure, mismanagement, theft, corruption and many others.
“For every upside, there is a downside.” The same counts for investing in gold.
Image credit: fishmanresearch.com